As we approach the end of a prolonged economic upturn for the lodging industry, many hotel owners are, or will soon be, faced with difficult decisions regarding their assets and how to maximize their value. As such, hospitality veteran Jay Litt is touting the value of his team’s vast experience and owner-centric approach to help ensure long-term success for hoteliers.
Litt is principal of The Litt Group, a capital project administration and consulting firm which has renovated over 45 properties spending over $100 million on behalf of multiple ownership entities during the past decade.
Litt explained that the company’s breadth of services have become increasingly hard to find in today’s hospitality market, particularly as many of the major brands have done away with their architectural and construction departments.
“Everyone of these hotels necessitates a certain amount of knowledge and that’s the knowledge we have. So we’ve carved ourselves a little niche here and we think we can be very successful in providing that kind of information to an industry which just doesn’t really have that many sources. So there’s really quite a gap when it comes to consulting in this particular area of project management, so I think we can fill in the gap pretty nicely,” he said.
Litt went on to offer some insights into the company’s range of expertise and detailed the business model. “We’re owners, we’re operators, we’re renovators; we can change the course of a hotel because we have been there, done it, and understand the business...We like to think that we put ourselves in a position where owners can come to us and realize they are dealing with an owner-centric group. We don’t make our money buying materials like a purchasing company. We don’t make our money in a variety of other ways that people make their money in this third-party area. We make money by giving advice based upon 40-plus years of experience,” he said.
That experience includes not only Litt, a 45-year industry veteran whose experience includes executive positions with Wyndham International and Interstate Hotels, among others, but also Lea Ann Kish who brings some 30 years of hotel operations management and renovation/development experience. Parker Mount--who has 32 years of hotel, restaurant, entertainment and retail development--rounds out the executive team.
In addition to advising clients, The Litt Group’s services include negotiating property improvement plans with brands; retaining purchasing and design groups; third-party report analysis; freight and warehousing logistics and negotiations with general contractors.
Litt elaborated on some of the company’s collective skill sets and benefits.
“We’re pretty experienced on the renovation side and the best uses of a group like us is for ownership to be able to ask what do we really do to make our hotels successful? What can we get away with not doing to save money? They look at us for that kind of advice,” he commented.
Litt later emphasized, “our main success has been in helping people save money on the project management side.”
Earlier this week, the company completed the renovation of the Candlewood Suites in Athens, GA, for Waramaug Hospitality. Litt noted that while the company has had as many as 16 projects going at once, he pegged its sweet spot as being in the 5 to 10 project range as opposed to working with larger portfolios.
“I’d rather try and stay a little more concentrated towards owners that are looking at one and two projects; not institutional owners. We’re more of a smaller firm that’s better for individual owners that are on their first, second or third time owning a hotel or hotel management companies that don’t have any project management group within them but definitely need some help to give an owner some advice that they can’t give. I think that’s our sweet spot,” he said.
Meanwhile, one industry trend that’s gained momentum in recent years is the continued emergence of new boutique hotel brands. Litt acknowledged the burgeoning segment’s potential, particularly when it comes to boosting the bottom line.
“The boutique business is totally different from a renovation standpoint. We’re excited about it, because it gives guys like us the opportunity to say to an owner ‘do this and this and you should probably get some decent returns on your operating statements,’” he said.
Litt underscored the importance of making the right decision when there’s a shift in industry conditions, which he noted is already occurring as many firms have reported that ADR and RevPAR growth have flattened out over the past year.
“You keep hearing the same thing [from owners] ‘it looks like a little bit less than what we thought.’ It’s not going to be 2009 but I think you’re going to see quite a few properties [for sale] and quite a few owners reconsider what the third and fourth quarter of ‘19 is going to look like and start looking ahead into ‘20 and seeing whether or not its time to either refinance, replenish, recapitalize or sell,” he said, later adding, “late in cycles is when some of the biggest mistakes are made in terms of purchasing hotels.”
Litt pointed out he remains positive on the industry’s long-term outlook. “This is a cyclical business. There’s no reason that a couple of years from now this won’t come back to being a strong 4-6 percent RevPAR growth market,” he noted.
Nevertheless, Litt elaborated on what he sees in the short term.
“There’s going to be some changes in ownership of hotels and we also believe that there’s going to be more emphasis on full-service hotels and full-service hotels that have pretty deep value gains in being renovated. Of course, I’m telling you that we’re in the right place at the right time but I think we are,” he said.
Litt concluded, “I think we found a place where our niche is a little bit different than everyone’s else and I’m glad we finally got there.”